Burn rate measures how quickly a company consumes its available cash. It is a critical metric for startups and growth-stage SaaS companies to determine runway and fundraising needs.

Example: A SaaS startup spends $200,000 per month on salaries, infrastructure, and marketing while generating $80,000 in revenue. Its net burn rate is $120,000/month, giving it 10 months of runway with $1.2M in the bank.